VG PIPE Developing Strong Trademark

Amid global economic recession described the worst since the Second World War, most enterprises in Vietnam were negatively affected. To edge up competitiveness and maintain growth, each enterprise has to seek its own direction. Reporter of the Vietnam Business Forum had a talk with Mr Nguyen Ngoc Bao, Deputy General Director of Vietnam Germany Steel Pipe Joint Stock Company on the company’s difficulties and solutions to market changes.

 

In my opinions, global economic slowdown has bottomed out and will revive in coming months. The steel industry had been seriously affected by economic slump in 2008 and early 2009. In 2008, incredible interest rate hike, unstable foreign currency source, unpredictable steel ingot and steel prices, which surged in the first half but plunged in the last half, caused adverse impacts to the industry. Sudden and unpredictable changes distorted forecasts of enterprises. Before such challenges, each enterprise had its own reactions: accepting losses to maintain production or renovate technology and expand markets or going bankrupt. VG PIPE decided to invest in cold steel laminating production lines to stabilise input sources, reduce reliance on imported sources and seek more export markets. When VG PIPE found more difficulties in the domestic market, it sought to boost sales in overseas markets. This is possibly an important progress of VG PIPE. With new directions, our products have penetrated into the United States, Canada, Australia, New Zealand and other nations. Foreign customers have sent positive feedbacks to us.

 

This is not a new event for foreign companies but it is a pioneering step for Vietnamese companies when they send their products to foreign nations, especially big markets like the US, Australia and Canada. The authorisation to our foreign distributors marked VG PIPE’s breakthrough and success in conquering markets. Exported sales account for 40 per cent of VG PIPE’s revenues. At present, our capacity fails to meet high demands for steel pipes in foreign markets.

 

Strong trademark and sustainable development are vital factors of our company but the human resource is the most important. We can invest in machinery and technology but we cannot lack human’s operations. A successful trademark comes from collective efforts. Good human resources will create driving forces for sustainable development. Our company always has flexible training policies to improve working skills of our workers and meet customers’ requirements.

 

Since our establishment, we employed the ISO 9001: 2000 quality management system, which is now replaced with ISO 9001:2008 verified and certified by Det Norske Veritas (DNV). In addition, we invested in state-of-the-art technologies from Germany and the United States to increase productivity, ensure product quality and satisfy customers’ requirements.

 

Corporate governance is the backbone of an enterprise and good governance ensures growth. Corporate governance also reflects the vision of the enterprise as well as its influence on the market. This is not the activity of large enterprises but the consideration of business leaders. VG PIPE has placed a top place for risk management since its incorporation. Currently, the entire company is operating under a common criterion which meets highest requirements. 

 

Presently, VG PIPE is a listed on the Hanoi Securities Trading Centre (HASTC), ticker VGS. The corporate governance directly impacts on the trust of investors. In 2009, the company expanded its factories and installed new production lines to scale up its output from 60,000 tonnes per annum to 100,000 tonnes. The company’s revenues surged from VND297 billion in 2006 to VND514 billion in 2007 and VND1,202 billion in 2008. Its respective earnings were VND3 billion, VND17 billion and VND15.3 billion. In 2009, the company expects its profit to grow 15 per cent from 2008.

 

Before we built our factories, we surveyed several localities and decided to locate in Vinh Phuc province. We saw this was a good place to invest and local authorities actively assisted investors. Investment procedures and other difficulties of our company are quickly solved. The consideration of local authorities for enterprises assured investors and improved the investment climate. However, there are certain difficulties inside industrial parks like poor infrastructure and disqualified workforce. Thus, the province should adopt policies to train its workforce systematically and professionally. Training should base on market needs; otherwise, employers have to retrain their new employees. It will affect corporate operations and productions. If such basic difficulties are resolved, Vinh Phuc will become an attractive destination for both domestic and international investors.